OVERVIEW

In recent times , Software  development and information technology enabled services (ITeS) including business process outsourcing (BPO)/ knowledge process outsourcing services (KPO) industry in India has emerged as one of the most dynamic and vibrant sectors in Indias economy. With a small beginning in early 80s, it has now grown into a broad based comprehensive industry. 

The government of India has announced promotion if IT as one of the vie priorities of the country. India has  embarked on a policy agenda, which aims to restructure its economy with enhanced global participation. The foreign Director Investment (FDI) to supplement domestic investment for achieving a quantum jump in growth rate is now an integral part of Government of India policy initiatives imparting greater transparency to business procedures and integration with the global market place are seen as the hallmark of new industrial, trade and  fiscal policies.  

Today, Indias competence in IT, more  significantly in computer software and information technology enabled services recognised globally. Indian IT firms and IT professionals have won world-wide recognition in terms of their technical competence, domain knowledge, experience and  expertise for offering quality IT services, and their exposure to working on various platforms and systems.

PRESENCE OF GLOBAL IT PLAYERS IN INDIA

There are a large number of multinational  IT enterprises operating in India in sectors such as: Integrated Chip Design, System software, communication software, R&D Centres, Technology Support sector, captive support sector, BPO Sector etc reaping the cost and quality advantages.  

These multinationals include Siemens/ Philips, Intel, Texas Instruments etc. (Chip Design); Siemens, Motoraola, Lucent Technologies, Sony, Nortel etc. (Communication Software); Google, Yahoo etc. (R&D Centres); Axa Business Services, Swiss Shared Services, Siemens Shared Services etc. (BPO Sector); Accenture, DELL, HSBC, GE Capital, Fidelity etc. (Captive Support Sector). 

SPECTRUM OF IT SERVICES/ ITeS FROM INDIA

India has already established her brand equity in the global IT market. Indian IT software and services firms offer software product/packages; a wide spectrum of IT services including system management and maintenance, consultancy services, system integration, chip design, E-Governance, E-Commerce, IT enabled services covering banking/financial/insurance sector. Their IT enabled services also include CAD/CAM Multimedia, animation work, BPO (Business Process Outsourcing) assignments, Call centre related assignments, as well as Knowledge Process Outsourcing (KPO) / Legal process Outsourcing (LPO), medical lab, diagnostic and dental  services, medical transcription services, e-publishing data conversion or digitization, type-setting, copy editing, content and design, graphics etc. 

The software industry is not only growing exponentially, it is moving up the value chain. It is evolving, from the initial staffing to software development

- where it is currently the worlds major  supplier of engineers  

- to integration and IT business consulting.

STRENGTHS OF INDIAN IT INDUSTRY

• One of the largest pool of  technically qualified high class IT manpower

• Enormous skilled human resource compared to developed countries leading to lower manpower cost  nearly one tenth of those in developed nations, thus giving India a comparative advantage.

• Offers a wide range of services from  support / data processing to sophisticated software systems etc.

• Rich experience of working with  large global companies and enjoy high credibility

• Expertise on a wide variety of platforms

• Accommodating nature of Indian IT workforce

QUALITY OF INDIAN IT EXPERTISE

Today the world recognises India as a  source of high quality IT manpower. 151 out of total 379 SEI CMM level 5 certified companies worldwide are  Indian. The Capability Maturity Model (CMM) for Software describes the  principles and practices underlying  software process maturity and is intended to help software organizations improve the maturity of their software processes in terms of an evolutionary path from adhoc, chaotic processes to mature, disciplined software processes. 

Over 300 Indian computer software and  services have already obtained ISO 9000 or CMM level 2 certification. It is  because of this high quality of Indian IT sector that the majority of multinational  companies in IT have either their  software development or research center in India. One third of the  e-commerce start-ups in the Silicon Valley continue to be lead by Indian. Over half of the Fortune 500 companies are outsourcing their software requirements to India. 

PRODUCTION

Production of Computer Software and  Services during the year 2008-09 is estimated to be Rs. 285064 crore (US$ 61.98 billion) registering a growth of  28.40 percent (12.40 percent in US$ terms) over the year 2007-08 when the total production of Computer software / Services was estimated to be Rs. 222010 crore (US$ 55.14 billion).

Production of Computer Software /  Services has been growing at an annual average growth rate of 30.87 percent  during the past five years.

SHARE IN GDP

Computer Software/Services production accounts for a share of 5.78 percent in Indias GDP at current prices during the year 2008-09.

DOMESTIC SOFTWARE AND SERVICES INDUSTRY 

During the year 2008-09 Indias  domestic computer software / services market is estimated to be Rs. 57230  crore (US$ 12444 million) registering a growth of 21.74 percent (6.57 percent in US$ terms) over the year 2007-08 when the domestic software / services industry was estimated at Rs. 47010 crore (US$ 11676 million). 

Out of the total production of  computer software / services  79.92 percent is exported and only 20.08 percent is consumed  by the domestic market.

Export of Computer Software / Services  (including ITeS / BPO) registered a growth of 30 percent (14 percent in US$ terms) during the year 2008-09 over the year 2007-08. In value terms, export of this sector during 2008-09 is  estimated to be Rs. 227834 crore (US$ 49.54 billion) up from Rs. 175000 crore ( US$ 43.46 billion) estimated in the year 2007-08.

EXPORT OF IT SOFTWARE /
SERVICES 

Export of IT Software / Services estimated at Rs. 164828 crore (US$ 35.84 billion) during 2008-09  registered a growth of 31 percent (15 percent in US$ terms) over the year 2007-08 when the export of IT software and services was estimated at Rs. 125500 crore (US$ 31.17 billion). 

ITES / BPO EXPORT

India today with its English speaking skilled manpower, high quality of services, very high productivity and a conducive policy environment with strong government support is the most preferred  destination for ITeS. India is a popular choice for customers seeking outsourced services because it is able to offer a 24X7 service and reduction in turnaround times by leveraging time zone differences. While customers are initially attracted by low costs, they stay on and expand because of the quality and productivity that India offers. India will remain a popular off shore Country. 

Outsourcing to India is turning out to be a blessing for the top companies. India s edge in quality and cost benefit is what is drawing organizations towards her. The level of excellence India has attained in this field has not come overnight. Government policies, infrastructure, large number of people who can speak fluent English, who can adapt to western accents, have all played a pivotal role in Indias success. 

During the year 2008-09, export of  ITeS/BPO registered a growth of 27 percent (11 percent in US$ terms) over the year 2007-08. In value terms, export of ITeS/BPO is estimated to be Rs. 63006 crore (US$ 13.70 billion) up from Rs. 49500 crore (US$ 12.29 billion) estimated in the year 2007-08.

MAJOR DESTINATIONS FOR SOFTWARE AND SERVICES EXPORTS DURING 2008-09

North America remains the top destination for Indias export of Computer Software / Services during the year 2008-09 as well. Although there has been a decline of 5 percent in percentage share of computer software and services exports, there has been a growth of 23.67 percent ( 8.26 percent in US$ terms) in export to North America during the year 2008-09 over the year 2007-08. In value terms, export to North America increased from Rs. 107625 crore (US$ 26.73 billion) estimated in 2007-08 to Rs. 133100 crore (US$ 28.94 billion) in the year 2008-09.

Export to EU Countries registered a growth of 48.72 percent (30.19 percent in US$ terms) during the year 2008-09. In value terms, export of software and  services from India to EU countries during 2008-09 is estimated to be Rs. 69489 crore (US$ 15.11 billion) up from Rs. 46725 crore (US$ 11.60 billion) estimated in the year 2007-08. With a high growth of 198 percent ( 161 percent in US$ terms) Middle East countries have emerged as 3rd top destination for Indias software and services exports during the year 2008-09. Export to this region increased from Rs. 2292 crore (US$ 569 million) estimated in 2007-08 to Rs. 6835 crore (US$ 1486 million) in the year 2008-09.

There has been decline in export to Singapore, Hong Kong & other South Asian countries, Japan, Korea and other Far East countries and Latin America during the year 2008-09.